Are Your Chiropractic Revenues Tied to Emotions or Logic?

When faced with decisions on major life purchases – house, car, building purchase, even expensive remodels or repairs – most of us responsible adult chiropractors tend to do some comparison shopping. We may go out and get three or four quotes, make a list of the pros and cons and then pick the best choice, right?

Wrong. While most consumers think they are making buying decisions based on logic, marketing research shows that we actually buy based on emotion. While this is bad news on the spending front, it can be even worse news when the same is applied to the earning power of our businesses.

Because we are small-business owners who know their patients well, we tend to get sucked into the emotional decision making process more than some corporate giant who has to conduct surveys to figure out the pulse of what their people want. We understand our patients needs intimately but many of us face that several obstacles that hold us back and tie us to emotionally based decision making. Here are a few examples:

Fee Fears

I’ve written about chiropractic fees multiple times before because it’s a big issue for DCs. Unfortunately, there’s rarely a week that goes by that I don’t speak to a prospective coaching client or chiropractor from the profession who hasn’t raised their fees in five years or more. If that’s you, yes this finger is pointing at you. There’s no logical basis for this decision as inflation hits every area of life, including your practice. The reason that you don’t raise your fees is fear. On the flip side is a lack of confidence. PLEASE, doctor, you do great work, your patients love you and they will stay with you even after you give your fees a little bump.

Emotions unfortunately work their way into how the vast majority of chiropractors choose their exam or E/M codes. In other words, they do not make their coding choices, which directly affects their billable services, based on logic, coding rules or any sort of methodical guidelines. In fact, most of the time, chiropractors choose their codes based on emotion. (If it’s any consolation, my former life as an Insurance Claims Analyst confirms that MD’s do this too)

On one side of the fence, chiropractors often “feel” that the depth of their probing, the length of their history and the thorough nature of their examination warrants a higher level code. Others let the emotions of fear overcome them and they feel that they want to stay “under the radar” so they choose a low level code for their services. Still others shoot straight down the middle, feeling safe and a little bit savvy that they are not part of either extreme. Regardless of their reasons, there are several problems here:

The first part of the problem is that schools train chiropractors to perform examinations for clinical or med-legal purposes but they do not intertwine this with the applications to billing or coding. DC’s begin their careers having no clue about the business side of practice and, in this case, they also begin without solid tools that teach them how to choose the correct coding level for their services.

The problem is compounded by those DC’s who down-code their services out of audit fear. With the threat of post-payment audits looming, coding in the middle or at the bottom doesn’t raise any flags, right? Perhaps, but perhaps you are just robbing yourself of income you deserved.

Regardless of whether he is under-billing, over-billing or billing accurately, the facts are that someone has to be at the top of the bell curve and someone has to be at the bottom. Rather than try to constantly base your decisions on hitting the “sweet spot” of the curve and landing square in the middle, perhaps it’s time to actually learn about what you are doing.

After all, there is really no safety in any position on the curve if it does not represent your services accurately and if you have not justified your procedures through proper documentation. So while you may think that coding the lowest level exam or adjustment provides a measure of safe harbor, if your documentation stinks, even the lowest reimbursements may be considered overpayments!

Logical, Compliant Coding Criteria is Available

So before you place yourself on autopilot and check off another 99202 or 99203 or 99204, consider what that really means. To properly document for new patient encounters, you must meet a set and determined level for three criteria:

History.

Exam.

Medical decision making.

Many chiropractors fly through exam decisions and recommendations so quickly after years of practice they scarcely notice they’ve done the work, let alone document it. They reason that auto accidents or work injuries need a bit more documentation, so they code higher. Cash patients may take less time and effort, so they code lower level exams.

While this reasoning has nothing to do with the three criteria mentioned above, it can also vary widely with reality. When I go into practices, I often see documentation that supports a higher level, but they undercoded because they didn’t realize was what was needed for the higher code. Some offices are the opposite and are exposing themselves to audit risk by coding higher than they should.

Also, while playing it safe by staying in the middle seems like the easy road, consider this: You are very likely leaving income — your income — on the table and auditors can still come in and look for errors on individual claims. The best bet is to do it right and back it up with proper documentation. Otherwise you might end up paying a high price for inadequate payment and your roof could seriously fall in.

If you don’t feel you are in the wrong or if you want to accelerate the urgency towards making sure you are doing things right, do this simple math exercise to see how much money is at stake in your office.

Take the price difference between the level of exams above and below the one you typically code for new patients. Now, take number of new patients you see per month and multiply it by those differences. Then multiply it again to see how much income you stand to lose or gain with your exam coding.

For example:

Say you normally code a 99202 and charge $100. Your 99201 is $75 and your 99203 is $150. You see 20 new patients per month on average.

By undercoding (using a 99202 instead of 99203), you are losing out on $12,000 per year in services generated.

By up-coding (using a 99202, but only documenting to support a 99201), you potentially risk post-payment demands of $6000 per year in income you didn’t really deserve to be paid.

Emotional Case Mismanagement

The last area I will briefly mention is case management. Here, it seems there are many chiropractors who dwell at the emotional extremes. Some are so sensitive to their patient’s pocketbook that they will literally under-recommend treatment out of fear that the patient can’t afford it. This is the pinnacle of emotional-based decision making.

Put simply: firstly, you have no idea if your patient can’t afford the care. Secondly, even if the care is an uncomfortable financial burden on them, you have no idea how much of a priority it is in their life. People put all sorts of stupid stuff and unnecessary fluff on credit cards, payment plans and the like because they chose to out of their own free will. By removing the recommendation, you are making the choice for them — and you are stepping out of your role of a doctor (who recommends the care they need) and into the role of some sort of unpaid and uninvited financial counselor (for which you have no license).

Some chiropractors allow this madness to continue to the “second” generation — their associate doctors. In the name of helping their associates out, they allow these young DC’s (who are typically more prone to emotional case management) to handle Personal Injury, Worker’s Compensation and other complicated cases without realizing the negative impact emotional case management has on their practice. For example, a young DC who mismanages a PI claim out of fear of recommending what the patient really needs can cause a practice to lose thousands of dollars from what is typically the best paying patients in the business. In short, get your associates out of the emotional case management habit (and yourself) or keep their hands off your most profitable patients.

Certainly, there are DC’s who operate at the other extreme and this is no good either. Largely, these are the docs who give our profession a bad reputation because they base care on the money they can make and on manipulating the system for their gain.

Too Soon Old, Too Late Smart

In David Livingstone’s classic book of uncommon common sense wisdom called Too Soon Old, Too Late Smart, he hits the nail on the head (many times) with respect to some of the big mistakes we make as chiropractors (and as people in general). But there’s one bit of wisdom that applies across the board to our discussion here today:

It is difficult to remove by logic an idea not placed there by logic in the first place.

Now that some of you have received your painful lesson, let me tell you that the errors mentioned above are typically the tip of the iceberg in what emotional decision making is costing you. Improper billing or coding, lack of solid systems and procedures and many more areas where logic needs to be installed are costing your business big time in terms of lost revenues and lost opportunities.

Here’s another observation that may serve as a warning side and hopefully call to action. If your chiropractic business is doing less than $40k per month, it’s even MORE likely that emotional decision making plays a big part in holding you back from achieving your true potential.

Why is this so? Frankly, the practices that are doing mid-six figures and above have usually overcome the obstacles tied to emotionally based decision making and have the solid systems and procedures in place that propel them beyond those dangers. That doesn’t mean their practices are perfect, but they are generally less prone to these mistakes.

The good news is that you absolutely can overcome the negative impact of emotional decision making and run a profitable, procedure and solid system based practice. The bad news is that you can’t do it the way you are running your business now.